Risk to reward ratio extremely poor.......

Many technicians are celebrating that S&P 500 recovered from its low of 1539.50 which was well above 50 DMA of 1531.11.....

I am not sure that optimism or reversal can last too long......

In my opinion, it does not matter if S&P 500 takes out all time high of 1576.09, that is only 23 points away.

I am more worried about seasonality & many other factors.

Q 2 is known to be a slower earning season for Technology, which means that guidance in Q 1 earnings will be weak.....

Retail is also weaker in Q 2...think April, May & June......

Sequester has disrupted not only job growth, but has resulted in job cuts.

Vacation is a big focus in many economies which continues in summer.

July & August is also weak which is 66% of Q 3......

Based on all of the above "seasonality"...i am expecting weak five months.....

September or October may provide good buying opportunities......

By the time all this weak seasonality plays out, we may be staring @ 1450 in S&P 500.....

SO...the trading strategy has to encompass two things :

- Low exposure

- Sell the rallies

I am personally involved in stocks which has been dogs & lately have shown very little downside risk. Between four of my position they are balancing out any weakness.

There also. IF i get lucky to have decent profit, i will book it.

SO.... it is all about exposure & strategic positioning.

Late September or early October should give us the indication that world economies have gained momentum or not.

Good luck with your OWN analysis, as this market can prove everyone wrong most of the time.

BLOG does NOT give buy or sell.

Saleem